Now is the Time To Think About Flood Insurance

Did you know that your homeowners insurance does not cover flood damage? Insurance against flood must be obtained separately. A flood insurance policy also reimburses you for the work that you and other family members did to sandbag your homes, move furniture and remove debris.

It may seem strange to be talking about flood insurance in the middle of the Arizona desert.  But floods do happen here in the Phoenix Metro area.  Just a few days ago the folks in the Anthem area were affected by local flash flooding.

Nationwide, only 20% of American homes at risk for floods are covered by flood insurance. Most private insurers do not insure against the peril of flood due to the prevalence of adverse selection, which is the purchase of insurance by persons most affected by the specific peril of flood. In traditional insurance, insurers use the economic law of large numbers to charge a relatively small fee to large numbers of people in order to pay the claims of the small numbers of claimants who have suffered a loss.

The National Association of Insurance Commissioners (NAIC) found that 33 percent of U.S. heads of household still hold the false belief that flood damage is covered by a standard homeowners policy. FEMA states that approximately 50% of low flood zone risk borrowers think they are ineligible and cannot buy flood insurance. Anyone residing in a community participating in the NFIP can buy flood insurance, even renters. However, unless one lives in a designated floodplain and is required under the terms of a mortgage to purchase flood insurance, flood insurance does not go into effect until 30 days after the policy is first purchased.

The Federal Emergency Management Agency's (FEMA) maps are important when it comes to flood insurance because if they show that your home sits in a 100-year flood plain, you must buy federal flood insurance in order to get a mortgage. If you live outside a high-risk zone, or if you no longer have a mortgage, flood insurance is optional.

Two excellent informational web sites are;http://www.fema.gov/national-flood-insurance-program
http://www.floodsmart.gov/floodsmart/

When considering your needs for insurance products for your home or business consider contacting Bennett Insurance Group at 623-979-4140 we can help protect you from loses do to flooding in the Arizona desert.

Brought to you by:
Jim Bennett
Bennett Insurance Group
623-979-4140
http://jimbennettinsurance.com
jim@jimbennettinsurance.com